Downsizing, job insecurity and firm reputation

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Jeon, Doh-Shin; Shapiro, Joel. Downsizing, job insecurity and firm reputation. 2004
To cite or link this document: Jeon, Doh-Shin Shapiro, Joel
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa 2004-11-01
dc.description.abstract This paper studies how firms make layoff decisions in the presence of adverse shocks. In this uncertain environment, workers' expectations about their job security affect their on-the-job performance. This productivity effect on job insecurity forces firms to strike a balance between laying off redundant workers and maintaining survivors' commitment when deciding on the amount and timing of downsizing. This framework offers an explanation of conservative employment practices (such as zero or reduced layoffs) based on firms having private information about their future profits. High retention rates and wages can signal that the firm has a bright future, boosting workers' confidence. Moreover, the model provides clear predictions about when waves of downsizing will occur as opposed to one-time massive cuts.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 795
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.title Downsizing, job insecurity and firm reputation
dc.type info:eu-repo/semantics/workingPaper 2014-06-03T07:14:12Z
dc.subject.keyword Microeconomics
dc.subject.keyword Labour, Public, Development and Health Economics
dc.subject.keyword downsizing
dc.subject.keyword layoffs
dc.subject.keyword employment policies
dc.rights.accessRights info:eu-repo/semantics/openAccess

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